Conflict greets Fannie proposal

WASHINGTON -- Key Republicans on Tuesday expressed skepticism about an emergency Treasury Department plan to bolster troubled mortgage giants Fannie Mae and Freddie Mac, defying President Bush and raising doubts on Wall Street about quick enactment.

Fannie Mae and Freddie Mac shares took a bath in the markets Tuesday as some traders apparently concluded the cavalry -- in the form of government help -- might arrive too late to save their investments. Fannie Mae shares fell 27.3% to close at $7.07, while Freddie Mac was down 26% to close at $5.26.

The shareholder-owned firms, which buy mortgages and resell them to investors as bonds, were created by Congress decades ago. Investors have been fleeing Fannie Mae and Freddie Mac as mortgage foreclosures rise and their positions weaken. The duo have holdings of about $5 trillion, and their regulator says they now have sufficient capital.

Bush, in a news conference ...